Median new-home prices take biggest plunge since 1970 as sales slow

Sales of new homes across the country have dropped to levels not seen since the early 1990s.

The U.S. Commerce Department is reporting that sales of new homes plunged in March to the lowest level in more than 16 years, a disturbing trend at the start of the traditional spring sales season.

On top of that, the median price of a new home sold in March compared with a year earlier fell by the largest amount in nearly 40 years: 13.3 percent, to $227,600. That's the biggest year-over-year decline since the 14.6 percent plunge in July 1970.

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Overall, sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991.

The troubling news on new home sales followed reports earlier this week showing sales of existing homes fell by 2 percent in March.

For March, sales were down in all regions of the country, dropping the most in the Northeast, by 19.4 percent. Sales fell by 12.9 percent in the Midwest, 12.5 percent in the Midwest and 4.6 percent in the South.